EC should ensure sustainable imports of cocoa prices from Ivory Coast and Ghana

A letter by a group of European Union parliamentarians has asked the European Commission to open negotiations with Ivory Coast and Ghana to address low cocoa prices.

The two African countries together produce more than 60% of the world’s cocoa.

Earlier this year, the group had called on the EU to create an economic pact which would ensure cocoa farmers earn higher wages. Most cocoa farmers in these countries live in extreme poverty, and earn under $1 a day, said the letter which was signed by members of the Responsible Business Conduct Working Group of the European Parliament.

Low cocoa prices are a key driver of deforestation and child labour in the sector, which are of concern to the EU as it seeks to prevent imports of commodities linked to environmental and human rights abuses.

“We urge the Commission to rapidly engage in formal negotiations with the governments of Cote d’Ivoire and Ghana with the aim of reaching an Economic Pact for Sustainable Cocoa,” states the letter.

The letter goes on to read, the economic pact would entail an agreement between all parties on ways to resolve low prices of cocoa and manage cocoa supply to prevent market shocks.

A spokesperson for the EU Commission did not immediately respond to requests for comments.

Incidentally, 67% of cocoa harvested by Ivory Coast and Ghana have destinations in the EU. A newly proposed EU law could force cocoa traders to drop some suppliers because they use unethical practices.

“In view of the environmental and social provisions implemented by the EU and many other countries in term of regulations, an ‘Economic Pact’ is now necessary… in order to satisfy the first condition of sustainability,” said Alex Assanvo, head of the Ivory Coast-Ghana Cocoa Initiative.

In 2019, both countries had imposed a “living income” premium on all cocoa purchases in order to raise farmers’ wages; in 2021, they said, traders were not passing on the amounts to farmers.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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